The SCONI scandium–cobalt–nickel tri–metal project is located less than three hours’ drive northwest of Townsville, Queensland. The SCONI project consists of five deposits, Greenvale, Lucknow, Bell Creek, Minnamoolka and Kokomo, with granted mining leases covering all key deposits.
On the 10th of October 2016, Metallica announced that the Company had entered into a Farm–in and JV Agreement with Australian Mines Ltd (Australian Mines) (ASX:AUZ) over Metallica’s 100% owned SCONI project.
Key terms of the Agreement include:
Stage 1 Earn–In
Payment of $250,000 to Metallica on execution of the Agreement (now received)
Australian Mines is able to earn 50% of SCONI after completing a Definitive Feasibility Study (DFS) or having expended $10 Million on the DFS within 4 years
Stage 2 Earn–In
Australian Mines is able to earn a further 25% (total 75%) in the project after arranging suitable finance to fund the development plan laid out in the DFS within 18 months of completing Stage 1
Other terms within the Agreement are typical of these type of agreements and include maintaining the tenements, dilution, buy–out rights and change of control provisions.
The JV with Australian Mines over the SCONI Project delivers on Metallica’s commitment to create value from non–core assets, preserves Metallica’s significant past investment, whilst maintaining an exposure to the continued upside from the development of the SCONI project.
Metallica remains in ongoing discussions with potential end users of scandium in both the Solid Oxide Fuel Cell sector and the Aluminium Alloy sector in relation to potential off take.
The SCONI Project is currently on hold pending funding and off-take agreements.